The conservatives' case for campaign finance reform

By
Ezra Klein

I’ve been listening to the conservative arguments against public-employee unions for the last few weeks, and it’s left me with one big question: Why aren’t more conservatives ferocious supporters of serious campaign-finance reform?

As David Brooks puts it, the problem with public-sector unions is that they “help choose those they negotiate with. Through gigantic campaign contributions and overall clout, they have enormous influence over who gets elected to bargain with them, especially in state and local races.” Then they negotiate with these same leaders — or representatives of these same leaders — for pay, pensions, etc.

But the same goes for corporations. The income of many corporations — Boeing is a good example — depend on government contracts. Tax policy is also important when it comes to setting take-home pay. Then there are rules, regulations, bailouts, backstops, and all the other ways that the government helps structure and shape the economy. And “through gigantic campaign contributions and overall clout,” corporations “have enormous influence over who gets to bargain with them.” And in the aggregate, of course, the business community spends much more than the unions — in 2010, business groups spent $1.3 billion, while unions spent $93 million.

Given that disparity, it’s not at all clear to me why I should worry more about the money unions spend on elections than the money corporations spend on elections. But more to the point, I’d like to reduce both: The AFL-CIO and the Chamber of Commerce and the Republican Party joined forces against the DISCLOSE Act. But the DISCLOSE Act was a good bill! And the Fair Elections Now Act is a better one. It’s curious that the alarm conservatives feel when they look at the nexus of moneyed interests and government power doesn’t translate into support for the sort of laws that might weaken that link.

Isn't the answer obvious? Because Republicans are bought by those same corporations and the very things they want to take away from unions are the things they want to protect for corporations. They don't want campaign finance reform because their corporate owners don't want it.

"Your case would be better if business gave the same overwhelming majority to Republicans which they do not. In fact businesses tend to give to whoever is in power."

Actually, that would make the argument weaker.

Unions give predominantly to Democrats. This means they have influence when Democrats are in power...and none when Republicans are in charge.

Business give to both parties (although likely more so to Republicans). This means they have influence regardless of who is in power. Just based on that their influence should be greater. That they give ten times more only exacerbates the problem.

We've got to stop being Shocked! and surprised when conservatives make absurdly inconsistent arguments in favor of business. That's what conservatism is, essentially that's all it is -- apologetics for business interests.

"Given that disparity, it’s not at all clear to me why I should worry more about the money unions spend on elections than the money corporations spend on elections."

You shouldn't. The people who are doing so because the unions give to Dems, and because the influence bought by those contributions is usually deployed to oppose the things the conservatives are buying influence to promote.

If you're looking for some kind of principled reason, you really haven't been paying attention to how this system works.

The accounting is more transparent for government contracts than than for public-employee agreements. Contracts have to get funded in current dollars, while employment agreements can be backloaded with pensions that get accounted for at a discount (by assuming unrealistic growth rates in pension fund set-asides).

Also, government typically has more remedies against non- or under-performing contractors than against public employees.

I don't know if your $1.3 billion includes dues paid to trade associations but it probably should since such groups also influence policy and elections in a number of ways. One clear way to help shine light on the process is for stockholders to introduce and support resolutions requiring disclosure of all payments to 501(c)(3) organizations. After all it is the stockholders who "own" the company and deserve an honest accounting of expenditures.

"it could be that more conservatives than liberals respect the first amendment, at least when it comes to the case of political speech and the right to spend money promoting your own beliefs."

It could be also be that you're a wingnut welfare recipient whose model of free speech is based on your anonymous paymasters being able to buy the loudest megaphones along with their professional spokesliars.

Setting aside all of the partisan considerations, part of the problem is that most national politicians are forced to exist in a permanent campaign mode. Obama's circle is already gearing up for an election that is two years away, and House members are always operating in that short campaign cycle window.

So both parties remained locked in a permanent "arms race" of fund-raising that makes it nearly impossible for either side to make a sincere effort to take the big money out of politics. The only way I can ever see it happening would be if the reform law had a built-in start date in the very distant future.

But even in that case, one of the problems with an arms race is that each side harbors a natural preference to win all-out, rather than to abolish the contest entirely and impose a level balance of power.

Kind of odd that Ezra would mention the DISCLOSE Act as something that would reduce money that both unions and corporations spend on politics. In reality, the DISCLOSE Act was highly pro-union, and would have increased the power of unions in politics. In particular, there were numerous provisions in the DISCLOSE Act that only applied to corporations, and did not apply to unions. For example, the bill included measures to prohibit spending from corporations (but not unions) holding government contracts. And it also included a provision prohibiting spending by corporations (but not unions) that had in excess of a certain level of foreign ownership.

Ezra would be far more persuasive if he could give an example of a measure that would decrease the power of both unions and corporations.

The accounting is more transparent for government contracts than than for public-employee agreements. Contracts have to get funded in current dollars, while employment agreements can be backloaded with pensions that get accounted for at a discount (by assuming unrealistic growth rates in pension fund set-asides).

Also, government typically has more remedies against non- or under-performing contractors than against public employees."

First, the accounting for public employees is much more transparent. Salaries are public, pension fund information is public -- every aspect is publicly available without much digging required.

In the case of private contracts, there's often a lot more opacity -- especially given that a lot of these involved layers upon layers of subcontractors.

If you look at the case of the Iraq War in particular, you can't say with a straight face that the accounting for spending during the war was largely transparent. In cases where people did some serious digging they found some really crazy cases of waste, fraud, and abuse. In some cases we still don't know where money went (e.g. the notorious case where 97 percent of $9 billion in cash in Iraq just disappeared).

It's also dubious that the government has more remedies with private contractors. In theory this might be true -- you could terminate a contract, but in practice this isn't as common as it should be. This is especially true with security contractors.

e.g. Wackenhut in Afghanistan gets busted for throwing parties with hookers in Kabul on the taxpayer dime. The cost of the contract has overruns, etc. Yet they get their contract renewed, because almost all of the big private security contractors have major issues.

The Boeing Supertanker is another example. With all of the big dollar contracts political considerations tend to factor into the decision making (e.g. which districts benefit from the contracts). In the case of killing dumb projects -- e.g. the F-22, or the second engine for the F-35 -- you had another side of the equation where projects may have eventually hit the chopping block, but not until billions had been spent beyond the practical necessity for actually funding the projects.

In the case of the Federal Reserve and the TARP bailout, it took strong legislative action just to see who received funding and how much (in the case of the Federal Reserve the audit only covers 2008-2009). With AIG there was a big fight just to figure out who was paid out from the taxpayer bailout fund.

The uses of funds for big contracts can also get complicated very quickly. In some cases this is by design, because the contract might deal with part of the covert ops "black budget". In other cases, the opacity is due to the fact that companies are anxious to avoid scrutiny on how they're actually using public funds.

Labor unions are already subject to more stringent disclosure provisions than anything that existed under the DISCLOSE Act.

e.g. Labor-Management Reporting and Disclosure Act of 1959.

The reason that unions supported the DISCLOSE Act wasn't because it would give them an unfair advantage; it's because right now they are subject to more stringent disclosure requirements than almost any of the large corporate donors or 3rd party groups. The law itself would have at least partially leveled the playing field.

Regardless, Ezra said the bill was good, not perfect. A bill can be worth passing because it will have a net positive effect even if it has serious flaws. The bottom line is that both unions and corporations have much more money in elections than they should. Nearly any bill that reduces the amount of money contributed to elections is a good thing.

How many unions have foreign owners with significant ownership stakes?

(I guess the closest case might be the Teamsters who have unions in the U.S. and Canada -- although as of 2001 both operate autonomously; also the "ownership" of those organizations can be voted in or out by employees; how many corporate bosses are subject to the same standard of one member one vote?)

I guess I don't buy the distinction that a labor union is synonymous with a multi-national corporate organization, so I don't really buy the argument that there's some kind of double-standard at work.

It seems more along the lines of your wanting to make an argument that: "If multi-national corporations lose some political influence, so should unions". Of course, if you look at union membership and influence in domestic politics over the past 30 years, it's pretty clear that the deck has been stacked strongly against unions, so that argument is more akin to: "I'm OK with corporate power being restricted in theory, so long as there is no check against that power in reality".

The big problem with the DISCLOSE Act as I see it is that it only addressed one side of the campaign finance coin. The political system would likely be more responsive to a broader range of interests if candidates spent less time raising money for the next election cycle. Of course, a narrow range of very powerful interest groups benefit from the stacked deck that we currently have -- and so do many incumbents -- so we've got the status quo in place for the time being.

I suspect this is one reason that Ezra points in the direction of the Fair Elections Now Act as being "even better".

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